DANBURY, Conn.--(BUSINESS WIRE)--Five Connecticut health care centers (Centers) managed by HealthBridge Management LLC announced today that the U.S. Bankruptcy Court for the District of New Jersey in Newark has agreed to confirm, with limited modifications, the Centers’ Chapter 11 Plan of Reorganization (the “Plan”).
This culminates a year-long process for the Centers to restructure their labor costs and other obligations and ensure that the Centers could obtain a competitive cost structure that would allow them to continue to provide quality long-term nursing care for the elderly in Connecticut. The Plan provides for the combination of concessions and a cash infusion of approximately $67 million from affiliated entities, and was accepted by the overwhelming majority of the Centers’ creditors.
In agreeing to confirm the modified Plan, the Court overruled the objection of The New England Health Care Employees Union, District 1199 (SEIU, District 1199) and the National Labor Relations Board, and paved the way for the Centers to emerge from bankruptcy in the coming days. In finding that the Plan was reasonable the Court noted, “the Plan proposes a reasonable opportunity to reorganize Debtors’ finances, pay creditors a meaningful distribution and, importantly, in my view, continued employment for 1,100 workers who care for the elderly and will receive $175 million in wages and benefits over the four years of the Plan.”
“We are pleased that the Court has agreed to confirm our Chapter 11 Plan with limited modifications clearing the way for us to officially exit bankruptcy, hopefully by the end of this week,” said HealthBridge spokesman Ed Remillard. “We will exit bankruptcy having gained relief from unsustainable and restrictive SEIU labor agreements that have hamstrung the Centers’ flexibility and competitiveness. Under the Plan, the Centers will have a competitive and durable cost structure and the Centers will be well-positioned to serve the needs of our patients, maintain our 1,100 employees and compete successfully in Connecticut.”
Under the Plan, the Centers’ creditors are entitled to a recovery of up to 75 percent on their claims and there will be no disruption in operations or services. “Throughout this process, we have made the continued high quality care of our residents our top priority, and we are pleased that the Chapter 11 proceedings have had no adverse effect on our patient care, relations with physicians or any other of the Centers’ normal operations,” said Remillard. “The financial commitments and undertakings that the Centers and their affiliates have made under the Plan demonstrate that the continued excellent care and safety of the Centers’ residents remains paramount,” he said.
The bankruptcy plan pertains only to the five unionized Connecticut Centers and does not apply to the other health care centers managed by HealthBridge Management, LLC. Each of the five centers is a sub-acute and long-term nursing care facility for the elderly in Connecticut. The facilities are: Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center.
The Chapter 11 filing was made in U.S. Bankruptcy Court for the District of New Jersey.
About the Centers
The five Centers provide long-term care and short-term rehabilitation services. For long term care residents who have medical needs, the Centers provide 24-hour-a-day nursing care, nutritional monitoring and planning, medication management and personal care. For individuals in need of nursing and/or rehabilitation services following a recent hospitalization for orthopedic surgery, stroke, oncology care, cardiac care, general surgery and other diagnoses, the Centers offer medical and physical rehabilitation including physical, occupational and speech therapy, rehabilitative nursing and physician directed rehabilitation plans, IV therapy, wound care and other services.